VF Corporation is one of the world’s largest publicly owned fashion apparel manufacturers, designing and producing a diverse array of clothing products for both the U.S. and international markets. The company owns an array of well-known brands in several categories that are sold through a variety of retail sales channels, including department, specialty, mass-merchant, and discount stores. VF is the leading maker of jeans in the United States, holding about one-quarter of the market with such brands as Wrangler, Lee, Rustler, and Riders. Approximately half of the company’s revenues come from the sale of jeanswear. Intimate apparel, which includes the Vanity Fair, Lily of France, Vassarette, and Bestform brands, generates about 16 percent of sales. Another 10 percent comes from marketing occupational apparel under the Red Kap, Penn State Textile, and Bulwark brands. VF also sells children’s playwear under the Healthtex and Lee brands, North Face outdoor apparel and equipment, and JanSport and Eastpak daypacks and bookbags. The company’s knitwear apparel business designs, manufactures, and markets imprinted sports clothing under licenses from Major League Baseball, the National Basketball Association, the National Football League, the National Hockey League, major universities and colleges, and top NASCAR drivers. Other operations include a chain of about 50 VF retail outlet stores located across the United States, selling a wide range of company products. More than 80 percent of company revenues are derived domestically; the remainder primarily originates in Europe, with South America and Asia contributing small portions of overall sales.

The Early Years

The company’s beginnings can be traced to the year 1899, when eight men formed the Reading Glove and Mitten Manufacturing Company in Reading, Pennsylvania, and began producing and selling knitted and silk gloves. Of the founders, two men had previous experience in the garment industry as hosiery manufacturing executives, while a third, John Barbey, was a brewer and banker and controlled the company’s financial operations. After 12 years of slow growth, Barbey purchased his partners’ interests in the company in 1911. The following year, Barbey’s son John Edward (known as J.E.) joined the firm as vice-president, and in 1913 the company’s name was changed to Schuylkill Silk Mills.

In 1914 the company expanded into the manufacture of silk lingerie, and after three years of successful sales, the Barbeys decided to conduct a contest to find a brand name for their lingerie line. The winner received a $25 prize for the name
“Vanity Fair.” With hopes of establishing a national reputation for the company’s merchandise, the Barbeys launched an extensive advertising campaign that emphasized the superior quality and style of Vanity Fair lingerie. This direct-to-the-consumer approach was considered innovative in that time period, because most other lingerie was of mediocre quality and was sold without brand names primarily through jobbers. The Barbeys’ campaign was successful, and as the Vanity Fair brand name became more well known, the company once again changed its name to Vanity Fair Silk Mills, Inc. in 1919.

By the early 1920s, the rising success of the lingerie product line prompted Vanity Fair to discontinue its glove manufacturing operation and devote itself exclusively to the business of making lingerie. J.E. Barbey was named general manager of the company in 1931 in addition to his position as vice-president. Union organizing activities in the Reading area in the 1930s prompted Vanity Fair to open a new factory in 1937 in Mon-roeville, Alabama, in the union-unfriendly South. J.E. Barbey was known for his antiunion views and did not want to run a unionized factory. The Reading plant remained in operation though not unionized, but after a new wave of organizing actions arose following the end of World War II and two unsuccessful attempts were made to unionize the plant, it was closed for good in 1948.

Innovation and Expansion in the Mid-1900s

Upon his father’s death in 1939, J.E. Barbey assumed the presidency of Vanity Fair, a position that he held for the next quarter century. During that time, he led the company through turbulent times, such as the economic changes that came with World War II. In 1941 the war brought about an embargo on silk, and the company began using rayon in the production of its lingerie. (The silk embargo also led the company to drop the word “Silk” from the official corporate name in March 1942.) Throughout the rest of the 1940s, Vanity Fair perfected the use of other new types of lingerie fabrics and subsequently introduced products made from a nylon tricot material in 1948.

These innovations changed the face of the lingerie industry. Nylon tricot was soon considered to be an ideal lingerie fabric because of its strength, wearing power, elasticity, and ease-of-care features. Its use also enabled the company to produce lingerie with a variety of fashionable features and in many popular colors. As a result, in 1950 Vanity Fair became the first lingerie manufacturer to receive the Coty Award for Design.

In 1951 Barbey, who owned nearly all of the company’s common stock, decided to take the company public. About one-third of Barbey’s shares were sold via an initial public offering. The stock traded over the counter until 1966, when a secondary stock offering of shares held by the J.E. Barbey Estate and Trusts was completed (Barbey had died in 1956). The offering represented about a quarter of the outstanding shares and left the Barbey trusts with about a 25 percent stake in Vanity Fair Mills. The offering also enabled the company to gain a listing on the prestigious New York Stock Exchange.

The founder’s son’s death marked the end of Barbey leadership at the company. Harold G. Miller, who had been with Vanity Fair since 1919, was named chairman. Neal Dow and Miller both served brief stints as president before Manford O. Lee began a long tenure in the position in early 1959. Lee, who began with the company in 1942, was named chairman in 1965 following Miller’s retirement.

Throughout the 1950s and early 1960s, the company achieved steady growth through its production of lingerie and foundation garments. Overseas expansion began in 1958 when Vanity Fair entered into an agreement with the U.K. firm Wolsey Ltd. to make Vanity Fair-style lingerie under the brand Wolsey-Vanity Fair. A similar agreement was reached with an Australian firm the following year. An International Division was created in 1962 to help drive foreign expansion. In 1967, as sales growth for lingerie items was beginning to top off, Vanity Fair attempted to offset the effects by expanding into the robe and loungewear market.

First Acquisitions in 1969; Emergence of VF Corporation

In the late 1960s, Vanity Fair began its evolution into a multibrand clothing powerhouse under the leadership of Manford Lee. The firm completed two major acquisitions in 1969, including the purchase of the H.D. Lee Company, Inc., a manufacturer of men’s and boys’ jeans and casual pants based in Shawnee Mission, Kansas. Also acquired was Reading, Pennsylvania-based Berkshire International Corporation, one of the world’s largest producers of women’s hosiery.

Company Perspectives:

VF is the global leader in creating powerful brands of apparel The consumer is the focus of everything we do.

We are the best at bringing people comfort and quality in our brands. We know our consumers, where they are and where they’re headed. We are dedicated to our retail partners. We believe in treating our associates, our colleagues and all those we serve in the course of doing business with the highest levels of honesty, integrity, consideration and respect.

Our world-class people are the source of our success. As a company, we bring excellence in operations and the latest technology to the art of apparel. We bring to market the right products at the right time. Working together, we have a bright future because we create superior products and market them with exceptional skill.

All these things mean success—for our associates, our retailers, our shareholders, our communities, and the millions of people who feel good in our brands.

These are the things that make us great. These are the things that make us VF.

H.D. Lee had been established in the midwestern United States in 1889 as a wholesaler called the H.D. Lee Mercantile Company. In the early 1900s, the firm began selling overalls that it obtained from a supplier in the eastern United States. Because deliveries from this supplier were often unreliable, Lee began manufacturing its own overalls, jackets, and dungarees in a factory in Salina, Kansas. It also introduced the Lee Union-All, a garment designed to protect an entire suit or uniform. The Union
All became the official doughboy fatigue uniform during World War I. Beginning in the 1920s, Lee launched a series of innovative fabrics and apparel, including heavy-duty denim and Lee Rider cowboy pants. In the 1940s, Lee improved its cowboy pants with a tighter fit and the Tighter Rider brand became the best fitting cowboy pants available. The company established its International Division in 1959, and was rewarded a Presidential “E” citation in 1964 for making an outstanding contribution to the export expansion program of the United States.

Berkshire International traced its roots back to the early 1900s, when it was founded as Berkshire Knitting Mills, a manufacturer of cotton stockings. The company’s production process applied paraffin wax to cotton thread to give the woven stockings the luster of silk. Berkshire developed into the world’s largest manufacturer of women’s hosiery, thanks in part to the popularity of motion pictures featuring beautiful actresses in short skirts and stockings, as well as to the outbreak of World War I, which fueled domestic production.

After acquiring the Lee Company and Berkshire International, Vanity Fair changed its name to VF Corporation as a means of reflecting its expansion into these new areas. VF Corporation was designated the parent company of H.D. Lee and Berkshire International, and a new subsidiary was formed under the Vanity Fair name to house the intimate apparel business. Another consequence of the acquisition of Berkshire was that VF gained a large amount of real estate that the latter company had needed because hosiery manufacturing demands a great deal of physical space. In 1970 some of Berkshire’s unused factory space in Wyomissing, Pennsylvania, three miles west of Reading was converted into the first VF factory outlet store. The second opened in Monroeville, Alabama, ten years later, and over the following two decades about four dozen more would begin operating. Initially the outlets offered only overstocks, factory seconds, and the like, but eventually about half of the merchandise was goods that had been specifically planned for sale through this channel.

Meanwhile, in 1971, VF acquired Kay Windsor, Inc., a manufacturer of budget-priced, ready-to-wear women’s dresses and sportswear. This business encountered difficulties during the 1970s because of the growing popularity of women’s pantsuits, however, and its division was closed down in 1982.

In 1977 a VF Corporation International Division was established to manage the company’s growing operations overseas. The need for this new division had arisen as the export of Vanity Fair intimate apparel to Europe and the Far East soon grew to include many of the products from the Lee Company and Berkshire International. VF reported profits of $28 million on revenues of $470 million that year.

Key Dates:

1899:

Eight men form the Reading Glove and Mitten Manufacturing Company in Reading, Pennsylvania.

1911:

One of the eight, John Barbey, buys out his partners.

1913:

Company’s name is changed to Schuylkill Silk Mills.

1914:

Company expands into the manufacture of silk lingerie.

1917:

Through a contest, “Vanity Fair” is selected as a brand name for the line of lingerie.

1919:

Company changes its name to Vanity Fair Silk Mills, Inc.

1942:

With World War II leading to an embargo on silk, the company drops the word “Silk” from the corporate name.

1951:

Vanity Fair Mills goes public.

1969:

Hosiery maker Berkshire International Corporation is acquired; Vanity Fair Mills changes its name to VF Corporation; company expands into jeanswear with the purchase of H.D. Lee Company, Inc.

1984:

Bassett-Walker, Inc., producer of fleece activewear, is acquired.

1986:

Purchase of Blue Bell Holding Company, Inc. for $762 million brings the following brands into the fold: Wrangler and Rustler jeanswear, Jantzen and JanSport swimwear and sportswear, and Red Kap occupational apparel

1991:

Children’s wear maker Healthtex, Inc. is acquired.

1997:

Consumerization initiative is launched, along with a corporate restructuring of the firm’s 17 divisions into five units called “coalitions”: Jeanswear, Intimate Apparel, Knitwear, Playwear, and International.

1998:

VF acquires Bestform Group Inc. and such intimate apparel brands as Bestform, Exquisite Form, and Lily of France; company headquarters are shifted from Wyomissing, Pennsylvania, to Greensboro, North Carolina.

Company launches major restructuring involving the closure of more than 30 U.S. plants, the elimination of more than 13,000 jobs, and the divestiture of the private-label knitwear business and the Jantzen swimwear unit.

An Industry Leader in the 1980s

Although the jeans market was beginning to experience diminished demand, VF entered the 1980s in a more profitable position than either of the two other major jeans makers, Levi Strauss & Co. and Blue Bell, Inc. VF’s success was attributed to less dependence on foreign markets; earnings from other areas, such as lingerie; million-dollar investments in capital improvements; and tighter inventory controls. VF also benefited from Levi Strauss’s decision to expand the distribution of its products to mass-merchandise outlets. Independent retailers that had previously carried the Levi’s brand angrily responded to this development by stocking the Lee brand instead. Because of the rising demand for Lee’s products, several of VF’s Berkshire International sites were converted to jeans manufacturing facilities, as Lee became VF’s largest operating division, accounting for as much as 80 percent of the corporation’s revenues in the early 1980s.

In 1980 Lawrence R. Pugh joined VF as president and chief operating officer. Pugh had previously worked in a variety of management positions at various companies, most recently as head of Samsonite’s luggage division. Manford Lee lost a battle with cancer in early 1982, and Pugh became CEO in addition to president. He became chairman of VF the following year. At that time, Robert Gregory was the president of the Lee division, and he joined Pugh in an effort to inject new life into the sluggish jeans market. The two men embarked upon a marketing strategy to set Lee apart from other jeans industry leaders by segmenting production into men’s and women’s lines. VF became one of the first producers to manufacture stretch jeans for women, as well as dressier, more expensive jeans, which began competing with the designer lines that had become popular. VF developed the Ms. Lee brand, which soon became the best-selling line of women’s jeans in the United States.

Meanwhile, VF was also segmenting and upgrading its Vanity Fair lingerie lines with more fashionable items to appeal to younger women. In addition to introducing new products, Pugh increased spending for advertising, expanded the company’s retail distribution channels, and increased the size of the VF sales force. The new initiatives helped propel revenues past $1 billion for the first time in 1993.

Continuing to diversify, in 1984 VF acquired Modern Globe, Inc., a manufacturer of men’s and women’s cotton undergarments since 1917, for $37.4 million. VF also purchased Bassett-Walker, Inc., a producer of fleece activewear based in Martinsville, Virginia, in November 1984 for $293.3 million. Bassett-Walker traced its origins to the founding of the Virginia Underwear Company in 1928 and by 1960 had become one of the largest manufacturers of knitted outerwear in the United States. The addition of these companies to VF’s corporate portfolio helped the parent company continue to diversify, which allowed it to avoid reliance upon any one product or market segment.

In 1986 VF became the United States’ largest apparel manufacturer and domestic jeans supplier when it acquired the Blue Bell Holding Company, Inc., a competitor that was the producer of Wrangler jeans, for $762 million. Blue Bell traced its origins to Hudson Overall Company, which was formed in Greensboro, North Carolina, in 1904. The company was renamed Blue Bell Overall Company in 1919 and merged with its chief competitor, Big Ben Manufacturing, in 1926. Ten years later, Blue Bell merged with another major work clothes manufacturer, Globe Superior Corporation, forming Blue Bell-Globe Manufacturing Company. After acquiring the H.D. Bob Company in 1940 and Casey Jones in 1943, the newly named Blue Bell, Inc. had begun manufacturing garments for the military in World War II. After the war, the company had applied the production methods it used in making military garments to the manufacture of casual clothing and western-style wear. In 1947 the brand name Wrangler was developed for this rapidly growing product line.

VF’s friendly purchase of Blue Bell was viewed as an ideal marriage between two companies that had similar manufacturing cultures. The merger offered VF an opportunity to expand more deeply into menswear, while also having available resources to broaden its distribution channels to include mass merchants and discount stores. Furthermore, when VF acquired Blue Bell, it purchased not only the Wrangler product line but also Blue Bell’s other holdings: the Rustler jeans product line, Jantzen and JanSport swimwear and sportswear, Red Kap occupational apparel, and licenses to the Marithé and François Girbaud upscale sportswear collections. The Rustler brand had been introduced by Blue Bell in 1979 as a basic jean to be sold through mass merchandisers. Red Kap, founded in 1922, had been acquired by Blue Bell in 1964. Blue Bell acquired Jantzen in 1980, 70 years after the swimwear maker’s founding. Four years later, Jantzen acquired JanSport, maker of backpacks and bookbags.

Although VF had grown considerably in size as a result of its many acquisitions throughout the 1980s, declining jeans sales finally caught up to it in 1989. In the past, whenever one division’s sales had slowed, VF had managed to survive the slump by relying on strong sales in its other divisions. This time, however, the company was paying the price for its decision three years earlier to begin marketing its Lee jeans through mass merchandisers and discount outlets. Just as competitor Levi Strauss had found when it attempted the same thing, the marketing error of moving into the discount realm ended up alienating department store buyers, who began refusing to carry the Lee line because of the lower-quality image it now possessed. Without the aid of department and specialty stores, VF found itself amidst a marketplace already dominated by low-cost importers with widely recognized brand names and large consumer advertising budgets. The Lee division traditionally had not given retail stores significant advertising support and found itself at a sizable disadvantage. As a result, both sales and profits in the jeans area fell significantly.

Compounding the company’s problems was the growing popularity of a new line of casual men’s apparel called Dockers, which had recently been introduced by Levi Strauss. The Dockers brand cut severely into VF’s sales of jeans. VF had not changed its basic Lee Rider style, and had been so involved in rejuvenating its jeans business that it had neglected to notice that other manufacturers had expanded into different trouser lines that took advantage of new apparel trends.

Early 1990s: Rejuvenation, New String of Acquisitions

In the early 1990s, VF not only began taking further measures to rejuvenate its jeans sales but also started focusing on the market segment of women aged 25 to 44. It continued to offer increased marketing for its women’s jeans lines, while also emphasizing support for other women’s apparel such as the JanSport and Jantzen lines. In 1990 the company purchased the manufacturing operations of intimate apparel brands Vassarette and Form-O-Uth from Munsingwear, Inc. for $11.5 million and added them to the intimate apparel division. The following year marked the $29 million acquisition of Healthtex, Inc. a leading manufacturer of children’s wear.

With a diverse array of products under its corporate umbrella, as well as numerous distribution options, VF instituted a program to strengthen relationships with its retailers and its consumers. First, VF began investing more time and money into researching the buying patterns, needs, and lifestyles of its consumers, so as to better serve them. The company then offered its retailers increased advertising and merchandising
support based on the results of its consumer research. The information obtained through market research was also helpful in determining which brands to emphasize at any given point in time. Furthermore, VF’s proprietary Market Response System was introduced, providing an electronic link between retailers’ sales floors and corresponding VF divisions and allowing VF to keep its products in stock at all times.

VF also saw continued growth as a result of its ongoing acquisition program. In 1992 the company purchased three European intimate apparel companies. VF spent $34.6 million for the Valero Group, a Paris-based firm that owned the Variance, Siltex, Bolero, and Silhouette brand names. The Spanish company Vives Vidal, S.A. (Vivesa) and its French affiliate Jean Bellanger Enterprises were bought for $116.3 million, bringing onboard the Intima Cherry, Lou, Carina, and Gemma intimate apparel brands. These additions, combined with the success of newly developed products throughout the year, helped VF break the $3 billion mark in annual sales for the first time in the company’s history. With the purchases, VF’s international division posted a sales increase of 52 percent for 1992.

Following that record year, Pugh handed down his role as president to Mackey J. McDonald, while still remaining at the company’s helm as chairman and CEO. McDonald was a onetime president of the Wrangler division who had worked his way through the ranks since joining VF in 1983. Together, the two led VF through a year of rejuvenated jeans sales, with the exception of the Girbaud division, which began experiencing a decline.

Completed in January 1994 were the acquisitions of Nutmeg Industries, Inc., for $352.2 million, and the H.H. Cutler Company, for $154.7 million, both of which helped VF become a leading supplier of licensed sports apparel. VF’s Bassett-Walker division actually benefited from these acquisitions as well, as it became the main supplier of knitwear for the two companies, and therefore increased its output.

The year 1994 was also characterized by cooperative endeavors between different VF divisions and other well-known companies. For example, H.H. Cutler teamed up with Walt Disney Company to create playwear featuring characters from the movie The Lion King, all of which sold out quickly and prompted the creation of similar items the following year featuring Pocahontas. Also, H.H. Cutler and Healthtex combined to introduce a Fisher-Price brand of children’s discount clothing. Jantzen worked with Nike, Inc. to develop a new line of performance swimwear, while Nutmeg readied itself to launch some of its 1995 sports apparel under the Lee Sport name.

Unique projects and ideas such as those above, coupled with VF’s conservative financial strategies and high level of brand name recognition by consumers, enabled the company to break the $5 billion mark in annual sales for 1995. At the end of the year, Pugh once again handed down one of his roles at VF to McDonald, who added the responsibilities of being CEO to his list of duties as company president. Pugh, who had overseen the company’s growth from two brands to nearly two dozen, remained with the company as its chairman.

Entering the late 1990s, a good majority of VF’s products were competing in mature markets, which dictated that the company’s future growth was contingent on deriving ways to gain market share. In VF’s favor was the evolving trend in many businesses toward dressing more casually at work. But rather than rely solely on such consumer trends and buying patterns, VF began actively formulating new methods to reach consumers and provide them with the best customer service possible, while at the same time increasing name brand recognition. For example, the company began testing a new interactive touch-screen computer program in stores called the Lee Fit-Finder, aimed at helping customers determine the best sizes and styles for their individual body types.

Late 1990s and Beyond: Restructuring and Adding Brands for Future Growth

The historic breaking of the $5 billion sales plateau in 1995 was accompanied by the negative news of a huge decline in net income, which dropped from $274.5 million to $157.3 million. This falloff highlighted the need for cost containment, particularly in an era in which consumers were increasingly seeking quality products at less-than-premium prices. One initiative to contain costs undertaken in the late 1990s was to move more of the manufacturing operations offshore. At the end of 1995, VF announced that it would close nine U.S. plants, laying off 3,800 workers in the process, and open new plants in Mexico and Central America. At the time, the company had about 80 percent of its manufacturing in the United States, and it was aiming to reduce this figure to 65 percent. Around this same time, VF began manufacturing and marketing Lee jeans in China through a joint venture in the province of Guangdong. In December 1997 subsidiary VF do Brasil Ltda. was formed to coordinate manufacturing and marketing activities of the Lee brand in Brazil, the second largest jeanswear market in the world.

One of the first initiatives that McDonald launched after becoming CEO was a program called “consumerization,” in which the company aimed to reorient all of its operations—including manufacturing, marketing, systems technology—toward meeting the needs of customers. VF needed a new organizational structure to support the new strategy because the old divisional arrangement was too complicated. Starting in 1997 the company’s 17 domestic and foreign divisions were consolidated into five operating units called “coalitions”: Jeanswear, Intimate Apparel, Knitwear, Playwear, and International. The restructuring cost about $150 million, and it was aimed at saving a similar amount by eliminating the redundancies of the divisional structure. At the same time, VF said that it would spend an additional $250 million over a four-year period to revamp its product line through a fresh round of advertising, consumer research, and product redesign. The company set a goal of achieving an additional $2 billion in revenue during this period, which would result in overall sales of $7 billion by 2000.

In March 1997, meanwhile, VF signed a letter of intent to acquire Maidenform Worldwide Inc., maker of intimate apparel under the Maidenform, Oscar de la Renta, and Self Expression brands. The acquisition of Maidenform, which had annual revenues of about $400 million, would have represented a major expansion of VF’s intimate apparel business, but the deal was called off in April. Later in 1997 VF expanded its jeans portfolio with the purchase of the Brittania brand from Levi Strauss. Brittania was a mass-market brand that VF subsequently repositioned
as a fashion-forward, young men’s jeans brand. Then in October 1997 the company announced that it would break with its Pennsylvania roots by moving the corporate headquarters from Wyomissing to Greensboro, North Carolina, in order to locate the corporate staff closer to where much of the firm’s marketing and support units were positioned. The move was completed in June 1998. VF’s factory outlet in Wyomissing, the company’s largest, stayed put.

VF succeeded in bolstering its intimate apparel lines by acquiring Bestform Group Inc. in February 1998. VF had had only two U.S. intimate apparel brands—Vanity Fair and Vas-sarette—but now gained such well-known brands as Bestform, Exquisite Form, Lily of France, Josie, Natori, and Oscar de la Renta (Bestform had purchased the license for the latter from Maidenform in October 1997). The addition of the privately held Bestform, which was founded in 1924 and had annual revenues of about $270 million, would push VF’s intimate apparel revenues past the $1 billion mark, making it one of the top three intimate apparel makers in the United States, with about 11 percent market share. There were three other significant developments in 1998: VF divested its license for the Girbaud designer clothing line; Pugh retired in October from his position as chairman, which was assumed by McDonald, who remained president and CEO as well; and VF acquired Penn State Textile Manufacturing, Inc., maker of restaurant apparel as well as table linens and restaurant supplies. Three more work-wear companies were acquired in 1999: Horace Small (public safety and postal apparel), Todd Uniform (custom-designed business uniforms), and Fibrotek (clean-room apparel).

VF’s acquisition spree continued in 2000. Eastpak, a maker of backpacks and daypacks, was purchased from Sunbeam Corporation. VF also purchased the Chic and H.I.S. jeans brands from Chic by H.I.S., Inc. and the Gitano jeans brand from Fruit of the Loom, Inc., which was in bankruptcy proceedings. The 2000 purchases were rounded out with the buyout of The North Face, Inc., which was in financial trouble and on the verge of filing for bankruptcy. North Face, which had annual revenues of approximately $240 million, produced outerwear and high-tech sporting gear. All told, VF spent $206.5 million and assumed $107.7 million in debt on these 2000 purchases.

The acquisitions of the late 1990s and 2000 brought about a need for a fine-tuning of the coalition organizational structure. In late 2000 a new Outdoor coalition was created to house North Face, Eastpak, and JanSport brands. An Imagewear coalition combined the company’s uniform and knitwear arms. At the same time, VF announced that it was discontinuing the nonapparel operations of the four recently acquired workwear businesses, closing another six higher-cost North American manufacturing operations, and consolidating its distribution centers in North America and Europe. The actions involved 2,700 employees losing their jobs. The company recorded restructuring charges of just under $120 million in association with these moves.

Even with the string of acquisitions, VF fell well short of its $7 billion sales goal for 2000, although revenues that year did reach a record $5.75 billion. Net income for the year fell thanks to the restructuring charge. Profits would fall still further the following year, and revenues would decline as well, as the retail market was hit hard by the economic recession in the United States and as another late-year restructuring was launched. In November 2001 VF announced that it would close down or divest three underperforming businesses: the company’s private-label knitwear operation, the Fibrotek workwear unit, and the Jantzen swimwear business; the latter was sold to Perry Ellis International in March 2002 for $25 million. The restructuring also involved the closure of more than 30 U.S. plants and the elimination of more than 13,000 jobs, or 18 percent of the total workforce. When the plant closures were complete, only about 15 percent of the company’s merchandise would be made in the United States, as another wave of production was shifted to Mexico, Central America, and the Far East. Restructuring charges for 2001 totaled $236.8 million, as the company aimed to cut its yearly operating costs by $115 million.

Continuing to focus on cost containment in the difficult economic environment of the early 2000s, VF announced in October 2002 that it would close five more U.S. plants and lay off about 3,000 more workers, thereby reducing its U.S. manufacturing to 10 percent of the overall total. The cost-cutting efforts resulted in improved profitability for nearly every VF business in 2002, although all told the firm posted a net loss of $154.5 million as a result of restructuring charges and a $527.3 million charge taken for a change in accounting policy for goodwill. With a low level of long-term debt and nearly $500 million in cash on hand, VF was poised to return to the acquisition arena, with prime targets including makers of jeanswear, intimate apparel, and outdoor apparel as well as “lifestyle” brands that might encompass several product categories. Having reacted quickly to reign in costs in the highly competitive marketing environment of the early 21st century, and with a history of being extremely adept in reacting to industry occurrences in positive and productive ways, VF Corporation appeared to possess the potential for continued growth and success.

VF Corporation is one of the world’s largest publicly owned fashion apparel manufacturers, designing and producing a diverse array of clothing products for both the U. S. and international markets. The company consists of numerous divisions, each of which is responsible for a different set of product lines, including jeans, sportswear, intimate apparel, and occupational clothing. Lee Apparel, the firm’s largest division, along with Wrangler and Marithe & Francois Girbaud, manufacture denim and other casual apparel for adults and children. B as sett-Walker specializes in activewear, such as sweatshirts, jogging suits, and jackets, while JanSport, Jantzen, Nutmeg, and H. H. Cutler manufacture the company’s different sportswear lines. Vanity Fair produces lingerie and loungewear items for women, and Healthtex is a leading producer of children’s wear. The Red Kap division markets a wide variety of occupational apparel for industrial use.

The Early Years

The company’s beginnings can be traced to the year 1899, when six men formed the Reading Glove and Mitten Manufacturing Company in Reading, Pennsylvania, and began producing and selling knitted and silk gloves. Of the founders, two men had previous experience in the garment industry as hosiery manufacturing executives, while a third, John Barbey, was a banker and controlled the company’s financial operations. After 12 years of slow growth, John Barbey purchased his partners’ interests in the company in 1911 and changed its name to Schuylkill Silk Mills. The following year, Barbey’s son joined the firm as general manager.

In 1914 the company expanded into the manufacture of silk lingerie, and after three years of successful sales, the Barbeys decided to conduct a contest to find a brand name for their lingerie line. The winner received a $25 prize for the name “Vanity Fair.” With hopes of establishing a national reputation for the company’s merchandise, the Barbeys launched an extensive advertising campaign that emphasized the superior quality and style of Vanity Fair lingerie. This direct-to-the-consumer approach was considered innovative in that time period, because most other lingerie was of mediocre quality and was sold without brand names primarily through jobbers. The Barbeys’ campaign was successful, and as the Vanity Fair brand name became more well known, the company once again changed its name to Vanity Fair Silk Mills, Inc. in 1919.

By the early 1920s, the rising success of the lingerie product line prompted Vanity Fair to discontinue its glove manufacturing operation and devote itself exclusively to the business of making lingerie. In 1937 it moved its manufacturing operation from Reading to Monroeville, Alabama.

Innovation and Expansion in the Mid-1960s

Upon his father’s death in 1939, J. E. Barbey assumed the presidency of Vanity Fair, a position which he held for the next quarter century. During that time, he led the company through turbulent times, such as the economic changes that came with World War II. In 1941, the war brought about an embargo on
silk, and the company began using rayon in the production of its lingerie. Throughout the rest of the 1940s, Vanity Fair perfected the use of other new types of lingerie fabrics, and subsequently introduced products made from a nylon tricot material in 1948.

These innovations changed the face of the lingerie industry. Nylon tricot was soon considered to be an ideal lingerie fabric due to its strength, wearing power, elasticity, and ease-of-care features. Its use also enabled the company to produce lingerie with a variety of fashionable features and in many popular colors. As a result, in 1950 Vanity Fair became the first lingerie manufacturer to receive the Coty Award for Design. Throughout the next decade, the company achieved steady growth through its production of lingerie and foundation garments. Then in 1969, as sales growth for these items was beginning to top off, Vanity Fair attempted to offset the effects by expanding into the robe and loungewear market.

Vanity Fair made two major acquisitions in 1969, including the purchase of the H. D. Lee Company, Inc., a manufacturer of men’s and boys’ jeans and casual pants. Also acquired at that time was Berkshire International, one of the world’s largest producers of women’s hosiery.

H. D. Lee had been established in the midwestern United States in 1860 as a wholesaler called the H. D. Lee Mercantile Company. In the early 1900s, the firm began selling overalls that it obtained from a supplier in the eastern United States. Because deliveries from this supplier were often unreliable, Lee began manufacturing its own overalls, jackets, and dungarees in a factory in Salina, Kansas. It also introduced the Lee Union-All, a garment designed to protect an entire suit or uniform. The Union-All became the official doughboy fatigue uniform during World War I. Beginning in the 1920s, Lee launched a series of innovative fabrics and apparel, including heavy-duty denim and Lee Rider cowboy pants. In the 1940s, Lee improved its cowboy pants with a tighter fit and the Tighter Rider brand became the best fitting cowboy pants available. The company established its International Division in 1959, and was rewarded a Presidential “E” citation in 1964 for making an outstanding contribution to the export expansion program of the United States.

Berkshire International also traced its roots back to the early 1900s, when it was founded as Berkshire Knitting Mills, a manufacturer of cotton stockings. The company’s production process applied paraffin wax to cotton thread to give the woven stockings the luster of silk. Berkshire developed into the world’s largest manufacturer of women’s hosiery, thanks in part to the popularity of motion pictures featuring beautiful actresses in short skirts and stockings, as well as to the outbreak of World War I, which fueled domestic production.

After acquiring the Lee Company and Berkshire International, Vanity Fair changed its name to VF Corporation as a means of reflecting its expansion into these new areas. VF Corporation was designated the parent company of H. D. Lee and Berkshire International, and a new subsidiary was formed under the Vanity Fair name to house the intimate apparel business. In 1971, VF acquired Kay Windsor, Inc., a manufacturer of budget-priced, ready-to-wear women’s dresses and sportswear. This business encountered difficulties during the 1970s due to the growing popularity of women’s pantsuits, however, and its division was discontinued in 1982.

In 1979, VF established an International Division to manage its growing operations overseas. The need for this new division had arisen as the export of Vanity Fair intimate apparel to Europe and the Far East soon grew to include many of the products from the Lee Company and Berkshire International.

An Industry Leader in the 1980s

Although the jeans market was beginning to experience diminished demand, VF entered the 1980s in a more profitable position than either of the two other major jeans makers, Levi Strauss or Blue Bell, Inc. VF’s success was attributed to less dependence on foreign markets; earnings from other areas, such as lingerie; million-dollar investments in capital improvements; and tighter inventory controls. VF also benefited from Levi Strauss’s decision to expand the distribution of its products to mass-merchandise outlets. Independent retailers that had previously carried the Levi’s brand angrily responded to this development by stocking the Lee brand instead. Due to the rising demand for Lee’s products, several of VF’s Berkshire International sites were converted to jeans manufacturing facilities, as Lee became VF’s largest operating division.

In 1982, Lawrence Pugh joined VF as president and chief executive officer, and became its chairman the following year. At that time, Robert Gregory was the president of the Lee division, and joined Pugh in an effort to inject new life into the sluggish jeans market. The two men embarked upon a marketing strategy to set Lee apart from other jeans industry leaders by segmenting production into men’s and women’s lines. VF became one of the first producers to manufacture stretch jeans for women, as well as dressier, more expensive jeans, which began competing with the designer lines that had become popular. VF developed the Ms. Lee brand, which soon became the best-selling line of women’s jeans in the United States.

Meanwhile, VF was also segmenting and upgrading its Vanity Fair lingerie lines with more fashionable items to appeal to younger women. In addition to introducing new products, Pugh increased spending for advertising, expanded the company’s retail distribution channels, and increased the size of the VF sales force.

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Continuing to diversify, in 1984 VF acquired Modern Globe, Inc., a manufacturer of men’s and women’s cotton undergarments since 1917. VF also purchased Troutman Industries, Inc., a manufacturer of men’s casual slacks, and Bassett-Walker, Inc., a producer of fleece activewear. Bassett-Walker had been founded in 1936, and by 1960 had become one of the
largest manufacturers of knitted outerwear in the United States. The addition of these companies to VF’s corporate portfolio helped the parent company continue to diversify, which allowed it to avoid reliance upon any one product or market segment.

In 1986, VF became the United States’ largest apparel manufacturer and domestic jeans supplier when it acquired the Blue Bell Holding Company, a competitor that was the producer of Wrangler jeans. Blue Bell was also a major manufacturer of work clothes, and after acquiring the H. D. Bob Company in 1940 and Casey Jones in 1943, Blue Bell had begun manufacturing garments for the military in World War II. After the war, the company had applied the production methods it used in making military garments to the manufacture of casual clothing and western-style wear. In 1947, the brand name Wrangler was developed for this rapidly growing product line.

VF’s friendly purchase of Blue Bell was viewed as an ideal marriage between two companies that had similar manufacturing cultures. The merger offered VF an opportunity to expand more deeply into menswear, while also having available resources to broaden its distribution channels to include mass merchants and discount stores. Furthermore, when VF acquired Blue Bell, it purchased not only the Wrangler product line, but also Blue Bell’s other holdings: the Rustler jeans product line, Jantzen and JanSport swimwear and sportswear, Red Kap occupational apparel, and licenses to the Marithe and Francois Girbaud upscale sportswear collections.

Although VF had grown considerably in size due to its many acquisitions throughout the 1980s, declining jeans sales finally caught up to it in 1989. In the past, whenever one division’s sales had slowed, VF had managed to survive the slump by relying on strong sales in its other divisions. This time, however, the company was paying the price for its decision three years earlier to begin marketing its Lee jeans through mass merchandisers and discount outlets. Just as competitor Levi Strauss had found when it attempted the same thing, the marketing error of moving into the discount realm ended up alienating department store buyers, who began refusing to carry the Lee line due to the lower-quality image it now possessed. Without the aid of department and specialty stores, VF found itself amidst a marketplace already dominated by low-cost importers with widely recognized brand names and large consumer advertising budgets. The Lee division traditionally had not given retail stores significant advertising support and found itself at a sizable disadvantage. As a result, both sales and profits in the jeans area fell significantly.

Compounding the company’s problems was the growing popularity of a new line of casual men’s apparel called Dockers, which had recently been introduced by Levi Strauss. The Dockers brand cut severely into VF’s sales of jeans. VF had not changed its basic Lee Rider style, and had been so involved in rejuvenating its jeans business that it had neglected to notice that other manufacturers had expanded into different trouser lines that took advantage of new apparel trends.

The 1990s and Beyond

In the early 1990s, VF not only began taking further measures to rejuvenate its jeans sales, but also started focusing on the market segment of women aged 25 to 44. It continued to offer increased marketing for its women’s jeans lines, while also emphasizing support for other women’s apparel such as the JanSport and Jantzen lines. In 1990, the company purchased the manufacturing operations of intimate apparel brands Vassarette and Form-O-Uth from Munsingwear, and added them to the intimate apparel division. The following year marked the acquisition of Healthtex, Inc. a leading manufacturer of children’s wear.

With a diverse array of products under its corporate umbrella, as well as numerous distribution options, VF instituted a program to strengthen relationships with its retailers and better understand the needs of its consumers. First, VF began investing more time and money into researching the buying patterns, needs, and lifestyles of its consumers, so as to better serve them. The company then offered its retailers increased advertising and merchandising support based on the results of its consumer research. The information obtained through market research was also helpful in determining which brands to emphasize at any given point in time. Furthermore, VF’s proprietary Market Response System was introduced, providing an electronic link between retailers’ sales floors and corresponding VF divisions and allowing VF to keep its products in stock at all times.

VF also saw continued growth as a result of its ongoing acquisition program. In 1992, the company purchased three European intimate apparel companies: Valero, Vivesa and Jean Bellanger Enterprises, which together added eight new international brand names to the VF portfolio. These additions, combined with the success of newly developed products throughout the year, helped VF break the $3 billion mark in annual sales for the first time in the company’s history.

Following that record year, Lawrence Pugh handed down his role as president to M. J. McDonald, while still remaining at the company’s helm as chairman and chief executive. Together, the two led VF through a year of rejuvenated jeans sales, with the exception of the Girbaud division, which began experiencing a decline. Also engineered in 1993 were the acquisitions of Nutmeg Industries, Inc. and the H. H. Cutler Company, both of which helped VF become a leading supplier of licensed sports apparel. VF’s Bassett-Walker division actually benefited from these acquisitions as well, as it became the main supplier of knitwear for the two companies, and therefore increased its output for the year.

1994 was a year characterized by cooperative endeavors between different VF divisions and other well-known companies. For example, H. H. Cutler teamed up with Disney to create play wear featuring characters from the movie The Lion King, all of which sold out quickly and prompted the creation of similar items the following year featuring Pocahontas. Also, H. H. Cutler and Healthtex combined to introduce a Fisher-Price brand of children’s discount clothing. Jantzen worked with Nike, Inc. to develop a new line of performance swimwear, while Nutmeg readied itself to launch some of its 1995 sports apparel under the Lee Sport name.

Unique projects and ideas such as those above, coupled with VF’s conservative financial strategies and high level of brand name recognition by consumers, enabled the company to break the $5 billion mark in annual sales for 1995. At the end of the year, Pugh once again handed down one of his roles at VF to
M. J. McDonald, who added the responsibilities of being chief executive officer to his list of duties as company president. Pugh remained with the company as its chairman.

Entering the late 1990s, a good majority of VF’s products were competing in mature markets, which dictated that the company’s future growth was contingent on deriving ways to gain market share. In VF’s favor was the evolving trend in many businesses toward dressing more casually at work. But rather than rely solely on such consumer trends and buying patterns, VF began actively formulating new methods to reach consumers and provide them with the best customer service possible, while at the same time increasing name brand recognition. For example, the company began testing a new interactive touch-screen computer program in stores called the Lee Fit-Finder, aimed at helping customers determine the best sizes and styles for their individual body types.

The company continued focusing on a combination of new product development, cost reduction, and inventory management measures to further strengthen relationships with retailers and enable the firm to respond more effectively to market needs. VF’s goal had long been to provide the right styles and quantities of products at the right prices on the retail shelf at all times. The ability to meet this goal will be a key determinant in the success of VF’s future activities, as it strives to maintain its leadership position, build market share, and increase shareholder value. With products available in almost every type of distribution channel, and with a history of being extremely adept in reacting to industry occurrences in positive and productive manners, VF Corporation entered the end of the century with potential for continued growth and success.

VF Corporation, one of the world’s largest publicly owned fashion apparel manufacturers, designs and produces jeans, sportswear, intimate apparel, and occupational clothing for both the U.S. and international markets. The company consists of several operating units, each of which is responsible for a different set of product lines. The Lee Company, the firm’s largest unit, and Blue Bell, Inc. manufacture denim and other casual apparel for adults and children under the Lee, Wrangler, and Rustler brand names. Bassett-Walker Inc. specializes in activewear, such as sweatshirts, jogging suits, and jackets. Jantzen Inc. manufactures the company’s line of swimwear and related sportswear, while the Red Kap division markets a variety of apparel for industrial use. Vanity Fair Mills, Inc., produces lingerie and loungewear items under the Vanity Fair brand name.

The company was formed in 1899 in Reading, Pennsylvania, by a group of six men, including two hosiery manufacturing executives and a banker, John Barbey. They selected the name Reading Glove & Mitten Manufacturing Company for their new venture, and began producing gloves of both knitted materials and silk.

After more than ten years of slow growth, John Barbey purchased the interests of his partners in the company in 1911 and changed its name to Schuylkill Silk Mills. His son, J. E. Barbey, joined the firm as its general manager the following year. In 1914 the company expanded into the manufacture of silk lingerie. After three years of successful sales, the Barbeys decided to conduct a contest to determine the brand name for the lingerie line. The winner received a $25 prize for the name “Vanity Fair.”

To establish a national reputation for the company’s merchandise, the Barbeys launched an extensive advertising campaign that emphasized the superior quality and style of Vanity Fair lingerie. This direct-to-the consumer approach was considered innovative for its time since most lingerie was of mediocre quality and was sold without brand names primarily through jobbers.

The company changed its name in 1919 to Vanity Fair Silk Mills, Inc. By the early 1920s and driven by the continuing success of its lingerie product line, Vanity Fair discontinued its glove manufacturing operation to devote itself exclusively to the lingerie business. In 1937 it moved its manufacturing operation from Reading to Monroeville, Alabama.

J. E. Barbey assumed the presidency of the company upon his father’s death in 1939, and held that position until he died in 1956. In 1941 the company began using rayon in its lingerie manufacturing process because of an embargo on silk during World War II. Throughout the rest of the 1940s, Vanity Fair perfected the use of other new types of lingerie fabrics and subsequently introduced products made from a nylon tricot material in 1948.

This innovation changed the course of the lingerie industry. Nylon tricot was considered to be an ideal lingerie fabric due to its strength, wearing power, elasticity, and easy-care features. It also enabled the company to produce lingerie with a variety of fashionable features and in popular colors. As a result, Vanity Fair became the first lingerie manufacturer to receive the Coty Award for Design, in 1950.

Vanity Fair achieved steady growth through its production of lingerie and foundation garments throughout the next decade. In 1969 it expanded into the robe and loungewear market, a move that helped offset softness in lingerie sales during this period.

Vanity Fair made several acquisitions in 1969, including H. D. Lee, a manufacturer of men’s and boys’ jeans and casual pants, and Berkshire International, a hosiery manufacturer. H. D. Lee was established in the midwestern United States in 1860 as H. D. Lee Mercantile Company, a wholesaler. In the early 1900s, the firm began selling overalls, which it obtained from an eastern U.S. supplier. Because deliveries were often unreliable, Lee began manufacturing its own overalls, jackets, and dungarees in a factory in Salina, Kansas. It also introduced the Lee Union-All, a garment designed to protect an entire suit or uniform. The Union-All became the official doughboy fatigue uniform during World War I.

Beginning in the 1920s, Lee launched a series of innovative fabrics and apparel, including heavy-duty denim and Lee Rider cowboy pants. In the 1940s, Lee improved its cowboy pants with a tighter fit and the Tighter Rider brand became the best fitting cowboy pants available.

In 1943 Lee Mercantile changed its name to the H. D. Lee Company, Inc. It established its International Division in 1959 and was rewarded a Presidential “E” citation in 1964 for making an outstanding contribution to the export expansion program of the United States.

Founded as Berkshire Knitting Mills, Berkshire International traced its roots back to the early 1900s when it was a manufacturer of cotton stockings. The company’s production process applied paraffin wax to the cotton thread to give the woven stockings the luster of silk. Berkshire developed into the world’s largest manufacturer of women’s hosiery, thanks to the popularity of motion pictures featuring beautiful actresses in short skirts and stockings, as well as the outbreak of World War I, which fueled domestic production.

To reflect its expansion into these new areas, the name of the parent company was changed from Vanity Fair to VF Corporation in 1969. A new subsidiary was formed under the Vanity Fair name for the intimate apparel business. In 1971 VF acquired Kay Windsor, Inc., a manufacturer of budget-priced, ready-to-wear women’s dresses and sportswear. This business encountered difficulties during the 1970s due to the growing popularity of women’s pantsuits and was discontinued in 1982.

In 1979 VF established an International Division to manage its growing operations overseas. This area had grown from the initial export of Vanity Fair intimate apparel to Europe and the Far East to include several manufacturing and sales facilities acquired from Berkshire International and Lee Company. At the same time, several of the company’s other Berkshire operations were sold or converted to jeans manufacturing facilities. This process continued throughout the rest of the 1970s and over the next two decades.

VF entered the 1980s as a more profitable producer than either of the other two major jeans makers, Levi Strauss and Blue Bell, Inc., in a jeans market experiencing diminished demand. This growth was attributed to less dependence on foreign markets; earnings from other areas, such as lingerie; million-dollar-investments in capital improvements; and tighter inventory controls. The company also benefited from Levi Strauss’s decision to expand the distribution of its products to mass-merchandise outlets. Independent retailers that had previously carried the Levi’s brand angrily responded to this development by stocking the Lee brand instead.

In 1982 Lawrence Pugh joined the company as president and became chairman the following year. Robert Gregory, the president of the Lee division, succeeded Pugh as president of the corporation. In an effort to inject new life into the sluggish jeans market, Pugh and Gregory embarked upon a marketing strategy to set Lee apart from other jeans industry leaders by segmenting production into men’s and women’s lines. VF became one of the first producers to manufacture stretch jeans for women and dressier, more expensive jeans, competing with the designer lines that had become popular. It developed the Ms. Lee brand, which became the best-selling line of women’s jeans in the United States. The company also segmented and upgraded its Vanity Fair lingerie lines with more fashionable items to appeal to younger women. In addition to introducing new products, Pugh increased spending for advertising, expanded the company’s retail distribution channels, and increased the size of the VF sales force.

In 1984 continuing to diversify, VF acquired Modern Globe, Inc., a manufacturer of men’s and women’s cotton undergarments. Modern Globe dated back to 1917. VF also purchased Troutman Industries, Inc., a manufacturer of men’s casual slacks that was subsequently closed in 1986, and Bassett-Walker, Inc., a producer of fleece activewear.

Bassett-Walker was started in 1936 as the Bassett Knitting Corporation. In 1941, after a reorganization, the company was named Bassett-Walker Knitting Company. Led first by S. S. (Sam) Walker and then by his son, Dudley Walker, after Sam’s death in 1960, the firm became one of the largest manufacturers of knitted outerwear in the United States. It assumed the name Bassett-Walker, Inc. in 1980.

In 1986 VF became the United States’s largest apparel manufacturer and domestic jeans supplier through its acquisition of Blue Bell Holding Company, maker of Wrangler jeans. Blue Bell was founded under the name of the Jellico Clothing Manufacturing Company in 1916. Three years later, after a move from Jellico, Tennessee, to a larger plant in Middlesboro, Kentucky, the firm changed its name to the Big Ben Manufacturing Company. It merged with the Blue Bell Overall Company of Greensboro, North Carolina, in 1926 and operated under this name until 1936 when it became the Blue Bell-Globe Manufacturing Company to reflect its subsequent merger with the Globe Superior Corporation. In 1943 the name was shortened to Blue Bell, Inc.

Blue Bell was a major manufacturer of work clothes, and after acquiring H.D. Bob Company in 1940 and Casey Jones in 1943, Blue Bell began manufacturing garments needed by the military in World War II. After the war, the company applied production methods used in making military garments to the manufacture of casual clothing and western-style wear. In 1947, the brand name Wrangler was developed for this rapidly growing product line.

VF’s friendly purchase of Blue Bell was viewed as an ideal marriage between two companies with similar manufacturing cultures. It offered VF an opportunity to expand more deeply into menswear and to broaden its distribution capabilities beyond existing specialty and department store channels into mass merchants and discounters. This acquisition followed an unfriendly takeover attempt of Blue Bell by buyout specialist Carl Icahn. Blue Bell averted that takeover through a leveraged buyout that took the company private. When VF acquired Blue Bell, it purchased not only the Wrangler product line, but also the Rustler jeans product line, Jantzen and JanSport swimwear and sportswear, Red Kap occupational apparel, and licenses to the Maritile and François Girbaud upscale sportswear collections.

Jantzen Inc. was established in 1910 as the Portland Knitting Company, a combination retail store and knitting operation. The company originally manufactured heavy sweaters, woolen hosiery, and other knit goods. In 1913, the firm began producing rib-stitched, wool swimsuits. Renamed Jantzen Knitting Mills in 1918, the company successfully sold swimwear during the 1920s in both the United States and overseas. With swimwear as its primary product, Jantzen broadened its product line to include sweaters, foundations, and casual sportswear. Jantzen became part of Blue Bell in 1980.

Red Kap was formed in 1923 as a wholesaler of bib overalls. During its first ten years of operation, the company expanded into the production of chambray shirts and industrial work pants. During the 1960s, the firm added coveralls to its product line. It became a division of Blue Bell, Inc. in 1964. During the 1970s, Red Kap added a line of career apparel under the Wrangler Uniforms label. This was followed by the introduction of the Big Ben brand of retail work clothes in the early 1980s.

By 1989 declining jeans sales finally caught up to VF. In the past, whenever one division’s sales had slowed, VF had managed to survive the slump by relying on strong sales in its other divisions. This time, however, the company paid the price for an error in marketing strategy it had made three years earlier. At that time, management had decided to sell its main brand of Lee jeans to mass merchandisers, in addition to its department and specialty store customers, to boost sales volume. This decision alienated department store buyers who had been selling the same line at higher prices. They refused to
carry the Lee line due to the lower-quality image it now possessed. This strategy also threw VF into a marketplace already dominated by low-cost importers with widely recognized brand names and large consumer advertising budgets. The Lee division traditionally had not given retail stores significant advertising support and found itself at a sizable disadvantage. As a result, both sales and profits in the jeans area fell significantly.

Compounding the company’s problems was the growing popularity of a new line of casual men’s apparel called Dockers, which had recently been introduced by competitor Levi Strauss. The Dockers brand cut severely into VF’s sales of jeans. VF had not changed its basic Lee Rider style and had been so involved in rejuvenating its jeans business that it had neglected to notice that other jeans manufacturers had expanded into different trouser lines that took advantage of new apparel trends.

In 1990 VF purchased the Vassarette brand and Form-O-Uth manufacturing operations for intimate apparel from Mun-singwear. This was followed, one year later, by the acquisition of Health-tex Inc. a leading manufacturer of children’s wear. Health-tex had been formed in 1921 as the Standard Romper Company, Inc. to produce and market children’s clothing. It changed its brand name in 1937 to Health-tex, although Standard Romper remained the corporate name until 1971. In 1973, Health-tex was acquired by Chesebrough-Pond’s Inc., a marketer of consumer products. Health-tex was sold in 1985 in a leveraged buyout to a group of investors who subsequently sold the firm to VF six years later.

In the early 1990s, VF was responding to consumer research results by returning to basic jeans manufacture, particularly for its primary market segment of women aged 25 to 44. It is working toward strengthening relationships with its retailers through increased advertising and merchandising support. In other areas, such as its sportswear and activewear businesses, VF is improving manufacturing efficiencies and restructuring operations to achieve better financial performance. Its intimate and occupational apparel lines continue to show healthy sales. VF International serves more than 150 countries with the company’s jeanswear products and expects significant growth to occur with the creation of the single European market in 1992, as well as in the North American market.

Despite this positive outlook, VF Corporation faces a mature market for its denim jeans business, which will require major strategic initiatives to sustain growth in the future. The company is focusing on a combination of new product development, cost reduction, and inventory management measures to strengthen relationships with retailers and enable the firm to respond more effectively to market needs. VF’s goal is to provide the right styles and quantities of products at the right prices on the retail shelf at all times. The company’s ability to meet this goal will be a key determinant in the success of VF’s future activities as it strives to maintain its leadership position, build market share, and increase shareholder value.